Mackinac Financial Corp. and First Federal of Northern Michigan Bancorp Inc. have had potential merger talks since 2006, but it was in August 2017 that the latter engaged a financial adviser to assist in the process.
Mackinac submitted a nonbinding indication of interest the following month. But while First Federal's board found the initial proposal "substantially acceptable," they decided to reach out to six other potential acquirers.
Of the six, five gained access to nonpublic information. None pushed through with an offer.
Subsequent negotiations between Mackinac and First Federal involved adjustments to the merger consideration, exchange ratio and special dividend, as well as the addition of a First Federal director to Mackinac's board. The merger agreement, first drafted Dec. 11, 2017, was still being revised as late as Jan. 11.
On Jan. 12, the boards of Mackinac and First Federal finally approved the terms of the merger agreement, including a $1.5 million termination fee to be paid by First Federal should the acquisition fall through under certain circumstances. The parties executed the deal on Jan. 16.
